New nuclear plants present great opportunities for sector, report says

Support from the government and the industry over the next decade is vital if the UK’s nuclear supply chain is going to thrive and take advantage of increased capacity, according to a new report.

A report by EY, entitled Creating confident investors and competitive advantage for the UK nuclear supply chain, has been produced with the help of several industry leaders on how the UK can take advantage of opportunities, with the government estimating investment of more than £45bn needed to develop the first three new nuclear power plants at Hinkley Point C, Wylfa Newydd and Moorside.

The paper states that the sector must recruit 8,600 people each year to ensure a skilled workforce is maintained with energy demand expected to rise by 20% over the next 20 years. Construction of more nuclear plants is said to be critical to ensure the security of supply, as it is expected that all but one of the UK’s nuclear plants will close by the end of the 2020s. 

Chris Lewis, EY’s UK & Ireland infrastructure lead, said: “This report calls for clarity on the need for nuclear power in our energy mix, and commitment between government and industry to invest in the UK capability. For the UK’s nuclear supply chain to capitalise on these opportunities, the industry needs to provide the pivot from an uncertain outlook. We need a model where the supply chain has the confidence from a clear pipeline of new build contracts, a unified industry championing the UK’s expertise and credentials, and investors are motivated and clear on the domestic and export opportunities.”

Nuclear industry leaders that contributed to the report agree that while the UK has substantial capability in nuclear, there was simply not the capacity to deliver it. Lewis believes the only way to grow national capacity is by “understanding national limitations” with the nuclear sector deal providing an opportunity for cross-sector supply chains to maximise utilisation through alignment of plans.

Lewis also said that there was still some uncertainty about whether future work woul materialise. “Our research stressed the importance of a clear view from government on the approaching nuclear new build projects," he said. "This is to ensure that suppliers are able to deliver the required capability. It was suggested by an interviewee that there is significant development required to upskill capability and suppliers do not always have the confidence that the work will arrive.

“Respondents also said that the supply chain will only respond when the demand arises and developers cannot expect the supply chain to absorb the risk to develop their capability. It is arguably the responsibility of government to commit to the project pipeline and deliver the certainty to suppliers that is essential to upskill and invest in capability," Lewis said.

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